<PAGE>
FORM 10QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: September 30, 1999
Commission file No. __________
AMERICAN CARD TECHNOLOGY, INC.
(Name of small business issuer as specified in its charter)
Delaware 06-1403123
(State of incorporation) (IRS Employer
Identification No.)
1355 Terrell Mill Road, Building 1462, Suite 200, Marietta, Georgia
30067
(Address of principal executive offices including zip code)
Issuer's telephone number: (770) 951-2284
Check whether the issuer (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 12 months
(or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes _X_ No__
The number of issuer's shares of Common Stock outstanding as of
September 30, 1999 was 3,901,136
Transitional Small Business Disclosure Form (check one): Yes __ No _X_
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
American Card Technology, Inc.
(a development stage company)
Balance Sheet
Assets
<TABLE>
<CAPTION>
Unaudited
September 30,1999
December 31,1998
-----------------
- ----------------
<S> <C> <C>
Current
Cash $ 144,227 $
137,130
Accounts receivable 34,825
169,505
Inventory 49,570
151,703
Prepaid expenses and other current assets 39,710
10,533
-----------
-------
Total current assets 268,332
468,871
Equipment, net 106,452
93,681
Other assets:
Software development costs, net 56,674
113,348
Deferred registration and debt costs 662,717
662,717
Other 5,071
7,820
-----------
- -----------
$ 1,099,246 $
1,346,437
-----------
- -----------
Liabilities and Stockholders' Deficit
<S> <C> <C>
Current:
Accounts payable $ 678,187 $
806,439
Accrued interest expense 707,523
525,984
Accrued salary and benefits 927,212
727,164
Other accrued expenses 70,000
52,000
Deferred revenue 112,000
196,547
Notes payable to banks 700,000
600,000
----------
- ----------
Total current liabilities 3,194,922
2,908,134
Notes payable to stockholders 309,361
309,361
Bridge financing notes payable 925,000
925,000
Notes payable 1,905,000
780,000
----------
- ----------
Total liabilities 6,334,283
4,922,495
----------
- ----------
Commitments and contingencies -
-
Stockholders' deficit :
Preferred stock, $.001 par value -
shares authorized 1,000,000; none issued
Common stock, $.001 par value -
shares authorized 20,000,000;
issued and outstanding 3,901,136 3,901
3,901
Additional paid-in capital 5,352,925
5,352,925
Accumulated deficit during
the development stage (10,591,863)
(8,932,884)
----------
- ----------
Total stockholders' deficit (5,235,037)
(3,576,058)
----------
- ----------
$ 1,099,246 $
1,346,437
----------
- ----------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
American Card Technology, Inc.
(a development stage company)
Statements of Operations
<TABLE>
<CAPTION>
Unaudited
Three Months Ended
---------------------------------
September 30,1999 September 30,1998
----------------- -----------------
<S> <C> <C>
Revenues $ 58,474 $ 115,035
Costs of sales 42,924 86,859
---------- ----------
Gross profit (loss) 15,550 28,176
---------- ----------
Expenses
General and administrative 273,979 284,884
Write -off of license fee - -
Research development 166,799 194,000
Interest and financing costs, net 101,884 518,093
---------- ----------
542,662 996,977
---------- ----------
Net loss $ (527,112) $ ( 968,801)
---------- ----------
Basic and diluted loss per share $ (0.14) $ (0.25)
Weighted average number
of shares outstanding 3,901,136 3,901,136
See accompanying notes to financial statements.
</TABLE>
<PAGE>
American Card Technology, Inc.
(a development stage company)
Statements of Operations
<TABLE>
<CAPTION>
Unaudited
Unaudited
Period from
Nine Months Ended
June 21,1994
(inception) to
September 30 September 30
September 30
1999 1998
1999
------------ ------------
- ------------
<S> <C> <C>
<C>
Revenues $ 384,301 $ 208,327 $
814,811
Costs of sales 260,694 204,738
695,788
---------- ----------
- ----------
Gross profit (loss) 123,607 3,589
119,023
---------- ----------
- ----------
Expenses
General and administrative 1,042,913 1,251,772
5,850,806
Write -off of license fee - -
168,000
Research development 471,658 517,000
1,733,953
Interest and financing costs,net 268,015 1,667,525
3,220,627
---------- ----------
- ----------
1,782,586 3,436,297
10,973,386
---------- ----------
- ----------
Net loss $ (1,658,979) $ (3,432,708) $
(10,854,363)
---------- ----------
- ----------
Basic and diluted loss per share $ (0.43) $ (0.88)
Weighted average number
of shares outstanding 3,901,136 3,920,621
See accompanying notes to financial statements.
</TABLE>
<PAGE>
American Card Technology, Inc.
(a development stage company)
Statements of Cash Flows
<TABLE>
<CAPTION>
Unaudited
Unaudited
Period from
Nine months ended
June 21,1994
--------------------------
(inception) to
September 30 September 30
September 30
1999 1998
1999
<S> <C> <C>
<C>
Cash flows from
operating activities:
Net loss $ (1,658,979) (3,432,708)
$(10,854,363)
Adjustments to reconcile
net loss to net cash used in
operating activities:
Depreciation and
amortization 91,867 85,085
314,148
Amortization of deferred
financing costs - 91,703
312,120
Issuance of debt for
services rendered - -
72,774
Issuance of stock for
services rendered - 300,116
300,116
Issuance of stock for
loan commitment - 300,116
300,116
Notes receivable exchange
for services - 5,000
5,000
Deferred registration
costs written off - -
352,966
Amortization of bridge
financing discount - 910,937
1,162,500
Changes in assets and liabilities:
(Increase) decrease in assets:
Accounts receivable 134,680 ( 4,876)
(34,825)
Inventory 102,133 (22,565)
(49,570)
Prepaid expenses and
other current assets (29,177) (1,713)
(39,710)
Other assets 2,749 (174)
(5,071)
Increase (decrease)
in liabilities:
Accounts payable (128,252) 310,077
678,187
Deferred revenue (84,547) -
112,000
Accrued expenses 399,586 495,845
1,734,734
-------- ---------
- ---------
Total adjustments 489,039 2,469,551
5,215,485
-------- ---------
- ---------
Net cash used in
operating activities (1,169,940) (963,157)
(5,638,878)
--------- --------
- ----------
Cash flows from investing activities:
Capital expenditures (47,963) (16,622)
(250,576)
Software development costs - -
(226,696)
-------- --------
- ----------
Net cash used in
investing activities (47,963) (16,622)
(477,272)
-------- --------
- ----------
Cash flows from financing activities:
Issuance of common stock - -
1,000
Deferred registration
costs - original - -
(352,966)
Deferred registration
costs - current - (433,806)
(662,718)
Deferred financing costs - (63,475)
(312,120)
Borrowings on line of credit 1,225,000 200,000
2,605,000
Proceeds from the issuance
of notes to stockholders - 1,042,500
3,514,681
Payments on notes to stockholders - (22,500)
(32,500)
Payments on bridge financing - (1,250,000)
(1,250,000)
Proceeds from the issuance
of bridge financing - 1,500,000
2,750,000
--------- ---------
- ---------
Net cash provided by
financing activities 1,225,000 972,719
6,260,377
--------- ---------
- ---------
Net increase (decrease) in cash 7,097 (7,060)
144,227
Cash, beginning of period 137,130 27,203
-
-------- ---------
- ---------
Cash, end of period $144,227 $ 20,143 $
144,227
-------- ---------
- ---------
Supplemental disclosures of
cash flow information:
Cash paid during the period for:
Interest $ 38,189 $ 147,388 $
290,053
------- ---------
- --------
Income taxes $ - $ - $
-
------- ---------
- --------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
American Card Technology, Inc.
(a development stage company)
Notes to Financial Statements
September 30, 1999
1. Basis of Presentation
The financial statements include the accounts of American Card
Technology, Inc. (a development stage company) (the "Company") and
its majority-owned Canadian subsidiary, which was formed in June
1996 and whose results of operations have been immaterial through
September 30, 1999. All significant intercompany accounts and
transactions have been eliminated in consolidation. The Company, a
Delaware corporation, was incorporated on June 21, 1994 to design,
develop and market high security, flexible multiple application
smart card systems.
The Company is in the development stage and its activities to date
have been limited to organizational activities including developing
a business plan, hiring personnel and developing and enhancing its
proprietary smart card technology and software, and it has only
recently commenced the limited marketing of its smart card systems.
Revenues to date, which have been received from few customers, have
been limited.
Certain stock splits were effected in 1996 and 1998 and reflected
retroactively in these financial statements.
The accompanying financial statements have been prepared assuming
the Company will continue as a going concern. This basis of
accounting contemplates the recovery of the Company's assets and the
satisfaction of its liabilities in the normal course of operations.
Since inception the Company has been involved in
organizational activities. The Company's ultimate ability to attain
profitable operations is dependent upon obtaining additional
financing adequate to complete its development activities, and to
achieve a level of sales adequate to support its cost structure.
Through September 30, 1999, the Company has incurred losses totaling
$10,854,363 and at September 30, 1999, has deficiencies in working
capital and equity of $2,926,590 and $5,235,037, respectively. These
circumstances raise substantial doubt about the Company's ability to
continue as a going concern. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
The Company filed a Registration Statement on Form SB-2 with the
Securities and Exchange Commission that was declared effective on
February 12, 1999. The public offering is being made on a "best
efforts" basis with the minimum and maximum estimated net proceeds
to the Company of $4,500,000 and $6,424,000, respectively. However,
there can be no assurance that the Company will be successful in
consummating its plans, including closing the IPO, or that such plans, if
consummated, will enable the Company to attain profitable operations or
continue as a going concern.
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-QSB and Item 310(b) of Regulation S-B.
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for
complete financial statements. The financial statements are
unaudited, but in the opinion of management, contain all
adjustments, consisting of normal recurring accruals, necessary to
present fairly the financial position, results of operations and cash flows
for the periods presented. Results of operations and cash flows for the
interim three and nine month periods are not necessarily indicative of what
the results of operations and cash flows will be for an entire year.
The accompanying condensed consolidated financial statements should
be read in conjunction with the consolidated financial statements
and notes thereto included in the Company's Annual Report on Form
10-KSB for the year ended December 31, 1998.
2. Notes Payable
At September 30,1999 and December 31,1998, the Company had lines of
credit with certain banks totaling $700,000 and $600,000, respectively. The
loans bear interest at the respective banks'prime interest rates and are due
on demand or through December 1999. Borrowings of $300,000 under these lines
of credit are secured by certificates of deposit of one of the Company's
stockholders held by the banks. Another stockholder has guaranteed the balance
of these loans.
In September 1998, the Company entered into additional unsecured lines of
credit with two different Offshore Trusts for $1,000,000 each. Loans under
each of these credit lines bear interest at 10% per annum and are due
June 30, 2001. During 1999, the Company entered into another unsecured
line of credit with a third Offshore Trust for $250,000. This line bears
interest at 10% and is due on June 30, 2001 or earlier to the extent that the
Company realizes gross profits (gross receipts less cost of goods sold) after
the closing of the Company's contemplated initial public offering. During the
second quarter of 1999, the Company entered into a $500,000 unsecured line of
credit with the Lilly Beter Capital Group, Ltd.( whose principal is a
director of the Company) of which $250,000 was outstanding as of September 30,
1999. This line bears interest at 10% and is due on June 30, 2001.
The Company has drawn down an aggregate of $1,905,000 and $780,000 from these
lines of credit as of September 30, 1999 and December 31, 1998, respectively.
Certain stockholders have guaranteed this debt.
3. Notes Payable to Stockholders
Notes payable to stockholders totaling $309,361 at September 30, 1999 and
December 31, 1998, bear interest at 10% per annum and were originally
payable on demand. The due dates of these notes have been extended to the
earlier of January 1, 2001 or the closing of a subsequent debt financing.
These notes have been used to finance operations. Notes totaling $500,000
were converted to equity in 1995, notes totaling $550,000 were converted to
equity in January 1997 and notes totaling $1,895,594 were converted to
equity in September 1998.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Company was organized in June 1994 and is in the development
stage. Since inception, the Company has been engaged principally in
organizational activities, including developing a business plan,
hiring personnel and developing and enhancing its proprietary smart
card technology and software, and has only recently commenced the
limited marketing of its smart card systems. The Company's
objective is to become a leading provider of smart card systems to
government and commercial enterprises ("System Sponsors") requiring
increasingly complex, secure and cost-effective information
processing systems. The Company intends to market its products
through strategic marketing alliances and licensing or other
arrangements with systems integrators, value added resellers and
other smart card vendors. The Company anticipates that, under
certain circumstances, its smart card products will be bundled with
its strategic partners' products and services to create a complete
integrated system that can be marketed to potential System Sponsors.
The Company will also seek to provide complete smart card solutions,
on a turnkey basis, to System Sponsors by providing all of the
hardware and software elements required to implement the system.
Liquidity and Capital Resources
At September 30, 1999, the Company had cash on hand of
$144,227, a working capital deficit of $2,926,590 and a stockholders' deficit
of $5,235,037. The Company's primary capital requirements will be to
fund the Company's continuing smart card system development and
enhancement efforts, its sales and marketing activities and the
Company's working capital. The Company has historically financed its
capital requirements through the issuance of equity and debt
securities, contributions to capital and bank borrowings.
The Company's capital requirements have been and will continue
to be significant. The Company has been dependent on the sales of
its securities to private investors, as well as on capital
contributions and loans from affiliates and certain financial
institutions guaranteed by certain stockholders of the Company.
During the period from inception through September 30, 1999, the
Company raised capital through such means in the estimated aggregate amount
of $7,360,000. As of September 30, 1999, the Company had lines of
credit in original principal amount aggregating $3,450,000 from
certain banks and trusts, of which $845,000 principal amount
remained available as of September 30, 1999.
On February 12, 1999, the Securities and Exchange Commission
declared effective the Company's registration statement on Form SB-2
relating to the offering of a minimum of 454,600 shares (and a
maximum of 648,900 shares) of common stock, at a price of $11.00 per
share (the "Offering"). The Company is dependent on and intends to
use the proceeds of the Offering to continue the implementation of
its proposed plan of operation. The Company anticipates, based on
assumptions relating to its current operations (including
assumptions regarding the Company's ability to meet its current
marketing objectives and the timing and costs associated therewith),
that the proceeds of the Offering, together with projected cash flow
from operations, will be sufficient to fund the Company's operations
and capital requirements for at least twelve months following the
closing of the minimum offering. In the event that the Company's
plans change, its assumptions change or prove to be inaccurate or
the proceeds of the Offering prove to be insufficient to fund
operations (due to unanticipated expenses, technical difficulties,
problems or otherwise), the Company would be required to seek
additional financing sooner than currently anticipated. There can
be no assurance that the Offering will close or that the proceeds of
the Offering will be sufficient to permit the Company to
successfully further develop and commercialize the Company's smart
card technology or that any assumptions relating to the Company's
operations will prove to be accurate. In addition, any
implementation of the Company's business plans subsequent to the
twelve month period following the Offering may require proceeds
greater than the proceeds of the Offering or otherwise currently
available to the Company. There can be no assurance that additional
financing will be available to the Company on commercially
reasonable terms, or at all. Further, if the closing of the
Offering is delayed, the Company may not have sufficient capital to
fund operations and the anticipated expenses of the Offering. Any
inability to obtain additional financing when needed may have a
material adverse effect on the Company, including requiring the
Company to curtail its activities and possibly causing the Company
to cease its operations. The Company's accountants have included an
explanatory paragraph in their report on the December 31, 1998
financial statements expressing substantial doubt about the Company
continuing in business.
Results of Operations
Revenues were $58,474 and $384,301 for the three and nine month
periods ended September 30, 1999 as compared to $115,035 and $208,327 for the
three and nine month periods ended September 30, 1998. The Company recognizes
revenue upon the shipment of products or the performance of services. The
sales cycle will vary by customer and could extend for periods of up to twelve
months, depending upon, among other things, the time required for development,
testing, and installation. During April 1999, the Company completed a
significant project which resulted in recognition during the second quarter of
1999 of $196,547 of Deferred Revenue. As of September 30, 1999, Deferred Revenue
totaling $112,000 is reflected on the Company's Balance Sheet. It is anticipated
that this amount will be recognized as revenue during the fourth quarter of the
current year.
For the third quarter ended September 30, 1999, general and
administrative expenses were $273,979 as compared to $284,884 for the third
quarter of 1998, a decrease of 4% due to lower costs associated with legal and
accounting fees. For the nine months ended September 30, 1999, general and
administrative expenses were $1,042,913 as compared to $1,251,772 for the
comparable period last year. The decrease of $208,859 is primarily due to the
following items. During the first quarter of fiscal year 1998, the Company
issued shares of common stock and warrants to an affiliate of the Company's
general counsel in consideration for services rendered. The Company expensed
$300,000 in connection with this transaction which is included in general and
administrative expenses. This expense was partially offset by the receipt of a
credit of $58,500 during 1998 for previously incurred costs of professional
services. In addition, during the nine month ended September 30, 1999, payroll
and related costs increased $31,233 over the comparable period last year.
Research and development expenses were $166,799 and $471,658 for the
three and nine month periods ended September 30, 1999 compared to $194,000 and
$517,000 for the respective periods last year. The decreases for the three
and nine month period compared to last year is due to a reduction in fees
paid to an outside contractor only partially offset by higher payroll costs.
For the third quarter ended September 30, 1999, interest and
financing expenses were $101,884 as compared to $518,093 for the third quarter
of 1998. The decrease of $416,209 is primarily due to a $354,740 charge
incurred last year relating to amortization of original issue discount costs and
deferred financing costs associated with the Company's 1998 Bridge financing.
For the nine months ended September 30, 1999 and September 30, 1998, interest
and financing costs were $268,015 and $1,667,525, respectively. The
decrease of $1,399,510 is primarily due to the aforementioned original issue
discount costs and deferred financing costs, which for the nine months ended
September 30, 1999 totaled $982,110, and also, during the first quarter of last
year,$300,000 was charged to interest expense relating to shares of common stock
issued in consideration for a loan commitment. Interest expense was further
reduced by the conversion of certain debt to equity on September 30 of last
year.
Forward-Looking Statements
This quarterly report contains forward-looking statements
about the business, financial condition, and prospects of the
Company and other forward-looking statements within the meaning of
Section 27a of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, as amended, that reflect
assumptions made by management and management's beliefs based on
information currently available to it. When used in this quarterly
report, words such as "believes," "expects," "intends," "plans,"
"anticipates," "estimates" and similar expressions are intended to
identify forward-looking statements, although there may be certain
forward-looking statements not accompanied by such expressions. The
Company can give no assurance that the expectations indicated by
such forward-looking statements will be realized. If any of
management's assumptions should prove incorrect, or if any of the
risks and uncertainties underlying such expectations should
materialize, the Company's actual results may differ materially from
those indicated by the forward-looking statements as a result of
many factors, including the risk factors set forth in the Company's
annual report on Form 10-KSB filed with the Securities and Exchange
Commission on April 14, 1999, as well as those set forth herein.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not a party to any pending legal proceeding
(and none of its property is the subject of any pending legal
proceeding).
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
On February 12, 1999, the Securities and Exchange Commission
declared effective the Company's registration statement on Form SB-2
relating to the offering of a minimum of 454,600 shares (and a
maximum of 648,900 shares) of common stock, at a price of $11.00 per
share. The offering has not yet closed.
ITEM 5. OTHER INFORMATION
By amendments dated September 15,1999 the Company has extended
(i) the closing date set forth in its Technology Purchase Agreement
with SoftChip Israel, LTD., and (ii) the commencement date of its Technical
Services Agreement (the "Services Agreement") with SoftChip Technologies (3000)
Ltd. through the earlier of the date of the closing of the Company's initial
public offering, December 31,1999, the closing of a private placement equal to
or greater than the minimum offering under the Company's proposed initial
public offering, or the closing of a combination of a private placement and an
initial public offering equal to or greater than the minimum offering under
the Company's proposed initial public offering. The amendment to
the Services Agreement further provides for an adjustment in the
term of the Service Agreement with the mutual agreement of the parties.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
The exhibits set forth in the Exhibit Index on the page immediately
preceding the exhibits are filed herewith as a part of this report.
b. Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the
nine month period ended September 30, 1999.
SIGNATURES
In accordance with the requirements of the Securities Exchange
Act of 1934, the registrant has caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
AMERICAN CARD TECHNOLOGY, INC.
By: /S/ LAWRENCE O. PERL
--------------------
Lawrence O. Perl,
Chief Executive Officer
By: /S/ FRANK S. FUINO, JR.
-----------------------
Frank S. Fuino, Jr.
Chief Financial Officer
EXHIBIT INDEX
Exhibit
Number Description of
Document
3.1 Articles of Incorporation. (1)
3.2 By-Laws. (1)
3.2.1 Amended By-laws. (1)
4.1 Sample Certificate for Common Stock. (1)
10.1 Amended Employment Agreement between the Company and
Lawrence O. Perl. (1)
10.2 Employment Agreement between the Company and Raymond
Findley, Jr. (1)
10.3 Amended Employment Agreement between the Company and
Robert H. Dixon. (1)
10.3.1 Employment Agreement between the Company and Frank S.
Fuino, Jr. (1)
10.4 Escrow Agreement, Bank of New York. (1)
10.4.1 Amended Escrow Agreement, Bank of New York, Dated August
24, 1999. (1)
10.4.2 Amended Escrow Agreement, Bank of New York,
Dated February 5, 1999.(1)
10.7.1 Subscription Agreement. (1)
10.7.2 Stock Option Agreement (warrant), Chapman Group, LLC. (1)
10.7.2.1 Amended, Stock Option Agreement (warrant), Chapman Group,
LLC. (1)
10.7.3 Stock Option Agreement (warrant), Harold Rothstein. (1)
10.7.3.1 Amended, Stock Option Agreement (warrant), Harold
Rothstein. (1)
10.7.4 Stock Option Agreement (warrant), Raymond Roncari. (1)
10.7.4.1 Amended, Stock Option Agreement (warrant), Raymond
Roncari. (1)
10.8.1 Stock Option Agreement for non-employees and Amendment,
Lilly Beter. (1)
10.8.2 Stock Option Agreement/non-employees and Amendment,
Harold Rothstein. (1)
10.8.3 Stock Option Agreement/non-employees and Amendment,
Raymond Roncari. (1)
10.8.4 Stock Option Agreement for non-employees and Amendment,
Bruce Bonadies. (1)
10.8.5 Stock Option Agreement for non-employees and Amendment,
Gordon Walker. (1)
10.8.6 1996 Nonemployee Director's Stock Option Plan. (1)
10.8.6.1 Amended, 1996 Nonemployee Director's Stock Option Plan.
(1)
10.8.7 1996 Stock Option Plan for Employees. (1)
10.8.7.1 Amended, 1996 Stock Option Plan for Employees. (1)
10.8.8 Amended Director Loan Agreement, Harold Rothstein. (1)
10.8.9 Amended Director Loan Agreement, Raymond Roncari. (1)
10.9.1 Amended Agreement with SoftChip Israel Ltd. and the
Company. (1)
10.9.1.1 Amended, Agreement with SoftChip Israel Ltd. and the
Company. (1)
10.9.1.2 Amendment to Technology Purchase Agreement with SoftChip
Israel Ltd.
10.9.2 Agreement with SoftChip Technology (3000) Ltd. and the
Company. (1)
10.9.2.1 Agreement with SoftChip Technology (3000) Ltd. and the
Company. (1)
10.9.2.2 Amendment to Technical Services Agreement with SoftChip
Technology (3000) Ltd.
10.9.3 Stock Option Agreement and Amendment, Shreveport
Acquisition
Corp. (1)
10.9.3.1 Amended, Stock Option Agreement, Amendment and Second
Amendment,
Shreveport Acquisition Corp. (1)
10.9.4 Amended, Stock Option Agreement for employee, Robert
Dixon. (1)
10.9.5 Amended, Stock Option Agreement for employee, Michael
Pate. (1)
10.9.6 Amended, Stock Option Agreement for employee, Robert
Patten. (1)
10.9.7.1 Amended, Stock Option Agreement for employee, Shawn Nixon.
(1)
10.9.7.2 Amended, Stock Option Agreement for employee, Jeremy Zela.
(1)
10.9.7.3 Stock Option Agreement for employee, Phyllis Burke. (1)
10.9.8 Stock Option Agreement for employee, Robert Cartagine. (1)
10.9.9 Stock Option Agreement for employee, Frank S. Fuino, Jr.
(1)
10.10.1 Loan Agreement between the Company and Prometheus Trust.
(1)
10.10.2 Promissory Note between the Company and Prometheus Trust.
(1)
10.10.3 Loan Agreement between the Company and International
Caribbean
Trust, Ltd. (1)
10.10.4 Promissory Note between the Company and International
Caribbean
Trust, Ltd. (1)
10.10.5 Articles of Incorporation of Animal Passports, Inc. (1)
10.10.6 Bylaws of Animal Passports, Inc. (1)
10.10.7 Consent of BOD, of Animal Passports Inc., acting in lieu
of first
meeting. (1)
10.10.8 Promissory Note between the Company and Butterfly Ltd.
Trust (2)
10.10.9 Loan Agreement between the Company and Butterfly Ltd. Trust (2)
10.10.10 Loan Agreement between the Company and Lilly Beter Capital
Group, LTD. (3)
10.10.11 Promissory Note between the Company and Lilly Beter Capital
Group, LTD. (3)
27.1 Financial Data Schedule.
99.1 Dual Smart Card Access, Patent Number # TX 3-639-032 for
the
Company. (1)
99.2 Amended Rothstein personal guarantee. (1)
99.3 Database Services Agreement and Addendum (Florida). (1)
99.4 Falcetta, Wachtel & Knochenhauer, LLC regarding the
Company. (1)
(1) Previously filed as an Exhibit to the Company's Registration
Statement on Form SB-2 (File No. 333-52169).
(2) Previously filed as an Exhibit to the Company's Form
10QSB for the
quarterly period ended March 31, 1999
(3) Previously filed as an Exhibit to the Company's Form 10QSB
for the
quarterly period ended June 30, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 144,227
<SECURITIES> 0
<RECEIVABLES> 34,825
<ALLOWANCES> 0
<INVENTORY> 49,570
<CURRENT-ASSETS> 268,332
<PP&E> 250,578
<DEPRECIATION> (144,126)
<TOTAL-ASSETS> 1,099,246
<CURRENT-LIABILITIES> 3,194,922
<BONDS> 0
0
0
<COMMON> 3,901
<OTHER-SE> (5,238,938)
<TOTAL-LIABILITY-AND-EQUITY> 1,099,246
<SALES> 384,301
<TOTAL-REVENUES> 384,301
<CGS> 260,694
<TOTAL-COSTS> 1,514,571
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 268,015
<INCOME-PRETAX> (1,658,979)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,658,979)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,658,979)
<EPS-BASIC> (.43)
<EPS-DILUTED> (.43)
</TABLE>
AMENDMENT TO TECHNOLOGY PURCHASE AGREEMENT
THIS AMENDMENT to Technology Purchase Agreement is made as of
the 15th day of September, 1999, by and between AMERICAN CARD
TECHNOLOGY, INC., a Delaware corporation ("American Card") and
SOFTCHIP ISRAEL LTD., a corporation organized under the laws of
Israel ("SoftChip").
WITNESSETH:
WHEREAS, American Card and SoftChip are parties to a technology
purchase agreement dated as of March 7, 1998, as amended by
Amendments, dated August 17, 1998, October 29, 1998, December 10,
1998, March 15, 1999 and June 15, 1999 (as amended the "Purchase
Agreement"); and
WHEREAS, American Card will not be closing an initial public
offering of its securities (the "IPO") by September 15, 1999; and
WHEREAS, SoftChip is willing to extend the date by which
American Card may purchase the technology pursuant to the Purchase
Agreement through December 31th, 1999 or the Closing Date as defined
below, whichever is earlier.
NOW THEREFORE, in consideration of the foregoing and the
covenants contained herein, the parties hereto agree as follows:
1. The definition of "Closing Date" in Section 1 of the
Purchase Agreement is hereby replaced by; '"Closing Date" shall mean
(i) December 31, 1999 or (ii) the closing of an initial public
offering of securities of the Buyer or (iii) the closing of
cumulative private placement equal or larger than the minimum
offering under the initial public offering or (iv) closing a
combination of (ii) and/or of (iii) together equal or larger than
the minimum offering under the initial public offering.'
2. Except as amended hereby, the Purchase Agreement remains in
full force and effect and is hereby ratified and confirmed.
IN WITNESS WHEREOF, the parties hereto have set their hands and
seals as of the day and year first above written.
Signed, Sealed, and Delivered
in the Presence of: AMERICAN CARD TECHNOLOGY, INC.
By: /S/ RAYMOND FINDLEY, JR.
---------------------------------------
Its President
SOFTCHIP ISRAEL LTD.
By: /S/ MICKEY COHEN
----------------------------------
Its Director
AMENDMENT TO TECHNICAL SERVICES AGREEMENT
THIS AMENDMENT to Technical Services Agreement is made as of the
15th day of September, 1999, by and between AMERICAN CARD
TECHNOLOGY, INC., a Delaware corporation ("American Card") and
SOFTCHIP TECHNOLOGIES (3000) LTD., a corporation organized under
the laws of Israel ("SoftChip").
WITNESSETH:
WHEREAS, American Card and SoftChip are parties to a technical
service agreement dated as of March 7, 1998 and amended pursuant to
two "Amendment to Technical Services" Agreements as dated December
10, 1998 and June 15, 1999 (as amended the "Service Agreement"); and
WHEREAS, pursuant to the Service Agreement, the term thereof is
to commence on that date which is the closing of a technology
purchase agreement dated as of March 7, 1998 and subsequently
amended (as amended, the "Purchase Agreement").
NOW THEREFORE, in consideration of the foregoing and the
covenants contained herein, the parties hereto agree as follows:
1. American Card and SoftChip each hereby acknowledge and
agree that the commencement of the Purchase Agreement has been
extended, and therefore the commencement of the Service Agreement is
likewise extended.
2. Section 1, "Engagement", of the Service Agreement shall as
of the date hereof, be amended by adding, at the end of the first
paragraph thereof, the following: "ACT and SoftChip agree that,
should ACT wish to engage SoftChip, and SoftChip agree, at its
discretion, to accept such engagement, to develop and deliver to ACT
Major Enhancements, and should the parties agree on the price of
such Major Enhancements, including the payment terms and delivery
schedule therefor ("Major Enhancement Price"), then the parties may
agree to shorten the term during which Technical Support is to be
provided under this Service Agreement and apply the compensation
which would be due for the cancelled period, towards payment of the
Major Enhancements Price. For the purpose of this provision, Major
Enhancement Price shall include the post delivery, on-going
maintenance of delivered Major Enhancements, if agreed to. Nothing
in this clause shall require that SoftChip agree to develop or
deliver Major Enhancements and/or that it must agree to maintain
such delivered Major Enhancements under any terms and/or any
conditions whatsoever."
3. Except as amended hereby, the Service Agreement remains in
full force and effect and is hereby ratified and confirmed.
IN WITNESS WHEREOF, the parties hereto have set their hands and
seals as of the day and year first above written.
Signed, Sealed, and Delivered
in the Presence of:
AMERICAN CARD TECHNOLOGY, INC.
By: /S/RAYMOND FINDLEY, JR.
-------------------------------
Its President
SOFTCHIP TECHNOLOGIES (3000) LTD.
By: /S/ MICKEY COHEN
-------------------------------
Its Director
